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Conflict of interest claims persist in Maine’s Nestle water case

As Maine’s Public Utilities Commission (PUC) considers a final decision on a 25-year water contract between the Fryeburg Water Co. and Nestle (owners of Poland Spring), critics and proponents of the controversial project are questioning the approval process, citing concerns that PUC members have ties to Nestle.

The current case surrounding Nestle and Fryeburg has led to divisions within the town and in Maine. This past summer, water justice advocates delivered 136,000 signatures to Gov. Paul LePage’s office protesting the contract. The proposed contract would allow Nestle to “continue to draw water at a low ‘tariff’ rate and pay lease fees to the water company, but would make a guaranteed minimum payment of about $144,000 every year, ensuring a more predictable cash flow,” according to an article by Portland Press Herald reporter Colin Woodard.

“Everybody in the PUC has significant relationships with Nestle,” said Bruce Taylor, a Fryeburg taxpayer and one of the case’s intervenors. “This is a clear conflict of interest.”

“If there is a conflict, it should be adjudicated,” said Mike Corthell, a member of the Fryeburg Business Association who supports the Nestle contract.

The calls for more transparency come after Woodard revealed that the PUC’s three commissioners and the state’s public advocate have all done work for Nestle at some point in their professional careers.

According to Woodard, PUC commissioner Mark Vannoy, who worked on 20 Nestle projects for the engineering firm Wright-Pierce, has already recused himself from the Fryeburg hearings. However, Commissioner David Littell, a former partner at Pierce Atwood, and PUC chairman Thomas Welch, who also worked at Pierce Atwood and was involved in the “2008 reorganization of the Fryeburg Water Co. that set the stage for the current contract,” have yet to recuse themselves. Public Advocate Timothy Schneider has also recused himself.

When reached for comment, Welch confirmed that he has yet to make a final decision about whether or not he will recuse himself, and is waiting for additional information to determine what he will do.

Welch, Woodard, Corthell, and Taylor will be discussing the Nestle-Fryeburg case tonight on Al Jazeera America’s The Stream.

“One factor that may come into play is whether the current matter is sufficiently related to matters from the past,” Welch said.

He also added that if he were to recuse himself, the PUC would lack plurality by only have one voting member for this specific case.

“I understand if I recuse myself, the case is over,” said Welch. Taylor, who believes that Welch has been very fair in this entire process, suggested that the PUC bring in alternate members for this specific vote.

A Poland Spring truck (John Patriquin/Portland Press Herald).

In response to critics, Welch did acknowledge that the decision to recuse himself is a difficult one.

“I am clearly in an uncomfortable position and I understand that people would feel this way,” he said.

Taylor, who became interested in the case since he felt the proposed contract would affect his own private water well, believes that Nestle is just exploiting one of Maine’s most valuable commodities—water.

“They’re buying a commodity at a cheap regulated rate from a monopoly they own and are reselling it for a high profit in the form of bottled water you find in your local 7-11,” Taylor said.

Taylor believes Nestle is paying too little for water and making too much profit off of Maine. He suggested “an inverted water rate for any commercial water that leaves the state of Maine.”

Requests to Nestle for comment about the PUC relationships and the case were never answered. The company also declined to appear on tonight’s Stream show. Instead, Nestle provided a fact sheet to the show’s producer.

Nisha Swinton, the New England organizer for DC-based Food and Water Watch, one of the contract’s most vocal critics, also questioned the PUC’s actions in a statement submitted to Al Jazeera America:

“It is highly critical that any possible conflicts of interest be avoided at all costs in order to safeguard the integrity, independence and credibility of the PUC. As numerous courts and administrative bodies similar to the PUC have regularly noted, even just the appearance of impropriety demands recusal. Given a prior relationship with commission members, any final decision in NWNA's [Nestle Waters North America’s] favor would inevitably be tainted by this blatant appearance of conflict. The only reasonable solution is for any and all members of the commission who were former Nestlé employees to recuse themselves.”

Food and Water Watch shared a list of public political contributions that Nestle, its officers, its lobbyists and its employees have made in Maine. The organization is alleging that Nestle is trying to influence how water business is conducted in the state.

Corthell still maintains that Food and Water Watch has a hidden agenda, and it is the biggest reason why he supports the proposed Nestle contract.

“Appearances can be deceiving. Food and Water Watch is just spreading propaganda, and nobody’s kidding me about their back agenda. The head of the Food and Water Watch once said, ‘We have time on our side and we will not stop.’ It’s all rhetoric. I have heard the same things from communists. It has a flavor and smell to it.”

One water industry lawyer who used to work with Nestle in California concurs that ideology does play into debates such as these, although private water utilities companies face very strict regulations.

“Some people in the U.S. will always be very skeptical of the role of private enterprises providing a public service,” said Wes Strickland of Brownstein Hyatt Farber Schreck, LLP in Santa Barbara. “The same can be said of those who are skeptical of government organizations.”

Strickland also added that labeling this debate as just a private versus public one is too simplistic. He said that a well-run water utility company is all about how it is run, no matter who owns it.

“The quality of service has to do more with the size of the system and the competence of the people who are running it,” said Strickland. “In general, the bigger the utility, the better it is run.”

Corthell also said that promises by Nestle of a new bottling plant in Fryeburg as a result of the contract being approved outweigh any concerns he has about the PUC’s conflicts.

“Poland Spring/Nestle has always been a good community partner,” said Corthell. “They take good care of their investment, and there is a long-term prospect of a bottling plant in the town.”

Taylor, whose lawyer is associated with Food and Water Watch, said that the more he has learned about the case, the more concerned he has become.

“This is a multilayered cake,” said Taylor. “It goes to the commercialization of water, the state protection of resources, and the issues of governance and fairness.”